I.T. Spending as a Measure of Organizational Disorder
This lecture includes Paul Strassmannâs most recent findings on the relationship between Mission, Transaction and Infrastructure uses of information technologies.
Run time 47 minutes 13 secondsProducer prof. Paul A. Strassmann, George Mason UniversityAudio/Visual sound
One of the most powerful concepts in physics are the laws of âEntropyâ which define the amount of energy unavailable to do useful work in a closed thermodynamic system. Entropy is also:
A measure of the disorder or randomness in a closed system;
A measure of the loss of information in a transmitted message (according to Claude Shannon);
A measure of inevitable and steady deterioration of any system unless disorder is reversed.
Strassmann views information technology as the most potent means for countering the deterioration as an organization grows in complexity and as the missions required for survival expand.
With the end of the âcold warâ â an era of relative simplicity in terms of goals and objectives â the Department of Defense finds itself in an era of rising complexity and instability. DoDâs information technologies now become the means for decreasing the losses in intelligence as that passes from its sources through a âtransactional bureaucracyâ to mission support.
A just completed analysis of DoDâs I.T. for FY2006 total spending of $30.1B shows:
- Support for the Warfighter consumes only 25% of the I.T. budget;
- Transaction Support such as Finance, Personnel, Logistics, etc. consumes 24% of the I.T. budget;
- Information Infrastructure consumes 51% an overwhelming of the I.T. budget;
The entropy of the I.T. structure becomes apparent through an examination of the scope and funding for 4,121 I.T. projects planned for FY2006. The budgets for most of these projects are small â with funding of less than $5 million each. Such projects can be devoted primarily to perpetuating and upgrading of local solutions. As result the rising entropy in the system prevails because resources become consumed for maintenance and only marginally for improvements of organizations that were designed to deal with obsolescent processes.
As entropy squanders rising budgets less money becomes available to pay for the high transition cost that could deliver what is suited to cope with new challenges. Even if one could get agreement as to what needs to be done there is no money available to pay for the hugely expensive transition expenditures from the yesteryear to where we need to be in the future unless the management of I.T. projects changes in line with best corporate practices.